New Approvals Provide Reason For Optimism In 2016

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Includes: BMY, GILD, ICPT, LLY, MRK, RHHBY, SNY
by: EP Vantage

Amid turbulent public markets, a stagnant IPO scene and a slowdown in M&A and venture funding, the biopharma sector needs a reason to be cheerful. And it could come in the shape of new approvals, with an impressive tally of 47 products likely to get the go-ahead this year.

If all these drugs are approved the fifth-year US sales for the class of 2016 would reach $23bn – quite a way off the 2015 total, but still a good showing compared with previous years (see tables below). However, one worry is that rather than being an aberration last year in fact represented the peak for new drugs, and it will be downhill from here.

Pharma companies will not want to entertain this possibility. Those with big sellers either already approved or set to get the green light this year include Roche (OTCQX:RHHBY) and Lilly (NYSE:LLY), which both have three drugs apiece in the charts.

This analysis covers approvals of new molecular entities (NMEs) and biologics license applications, and represents a view of novel agents. It does not include new combinations or formulations that would be approved under different a different set of rules.

2016 looks set to be a key year for Roche, particularly if it can bag approval for its multiple sclerosis candidate Ocrevus, which has seen its forecast rocket since the release of positive phase III data last October and is now positioned as the top dog out of this year’s existing – and potential – entrants.

FDA approval analysis – the past decade

Year

NMEs approved

Biologicals approved (CDER + CBER)

Total NMEs + biologicals

US sales 5th yr post approval ($bn)

2016 potential total

29

18

47

23.0

2016 to 19 July

10

7

17

11.5

2015

32

24

56

32.0

2014

31

19

50

26.3

2013

25

10

35

16.3

2012

31

12

43

13.7

2011

24

11

35

11.3

2010

15

11

26

12.5

2009

19

15

34

5.4

2008

21

10

31

5.6

2007

16

10

26

4.3

2006

18

11

29

8.9

10yr average (06-15)

23

13

37

14.0

Current 5yr average (11-15)

29

15

44

20.0

Previous 5yr average (06-10)

18

11

29

7.0

Roche is going for a one-two: it already has the biggest approved product in Tecentriq, its anti-PD-L1 MAb that got the thumbs-up in May for bladder cancer and is also under review for non-small cell lung cancer, with a PDUFA date of October 19.

However, in the latter indication it will find it hard to catch Bristol-Myers Squibb’s (NYSE:BMY) PD-1-inhibiting juggernaut Opdivo, which is forecast to bring in $11bn by 2021 according to EvaluatePharma consensus.

Opdivo and another Bristol drug, Yervoy, account for around 85% of checkpoint inhibitor sales; Roche will need to target new indications and combinations to get a foothold in the market.

Top five approvals of 2016 to date (to July 19)

Product

Pharmacology class

Company

Approval date

US sales 2021 ($m)

Tecentriq

Anti-PD-L1 MAb

Roche

18 May 2016

2,870

Zepatier

NS3/4A protease inhibitor & nucleoside NS5A polymerase inhibitor

Merck & Co

28 Jan 2016

1,455

Ocaliva

Farnesoid X receptor agonist

Intercept Pharmaceuticals

27 May 2016

1,150

Venclexta

B-cell lymphoma 2 inhibitor

Roche

11 Apr 2016

927

Taltz

Anti-IL-17A MAb

Eli Lilly

22 Mar 2016

895

Merck & Co’s (NYSE:MRK) hepatitis C treatment Zepatier also rates highly this year despite a tough competitive environment, no doubt helped by the company’s aggressive pricing strategy.

Meanwhile, Intercept’s (NASDAQ:ICPT) primary biliary cirrhosis therapy Ocaliva is a more surprising inclusion in the top five already-approved products, but over half of its forecast is from the bigger indication of non-alcoholic steatohepatitis (NASH), where approval is far from assured.

Timing

However, several of the top unapproved drugs could in fact get the go-ahead in 2017, denting this year’s totals.

Two on the list have yet to be filed – Sanofi’s (NYSE:SNY) dermatitis contender dupilumab and Lilly’s breast cancer hopeful abemaciclib – but have breakthrough therapy status, so could get approval quickly once filed.

Lilly’s rheumatoid arthritis therapy baricitinib and Gilead’s (NASDAQ:GILD) hepatitis B treatment tenofovir alafenamide, meanwhile, have PDUFA dates in January, but it is conceivable that they could get the nod earlier.

Top five potential approvals of 2016

Product

Pharmacology class

Company

Approval date

US sales 2021 ($m)

Ocrevus

Anti-CD20 MAb

Roche

28 Dec 2016

2,908

Dupilumab

Anti-IL-4 & IL-13 Mab

Sanofi

Rolling submission to complete this year

1,821

Baricitinib

JAK-1/2 inhibitor

Eli Lilly

Jan 2017

912

Abemaciclib

Cyclin-dependent kinase 4 & 6 inhibitor

Eli Lilly

Filing due Q3 2016

905

Tenofovir alafenamide

Nucleoside reverse transcriptase inhibitor

Gilead Sciences

Jan 2017

758

The fate of these four products could have a bearing on whether 2016 is seen as a success or a damp squib for new drugs, but either way it will fail to live up to the monster year of 2015. If it is merely a return to business as usual, rather than the start of a downturn, pharma companies will likely be satisfied.

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